INCORPORATION OF PVT LTD COMPANY

INCORPORATION OF PVT LTD COMPANY UNDER NEW COMPANIES ACT

In this blog we'll explain detail procedure and various provisions applicable for incorporation of a Pvt.Ltd. Co. ( other than ONE PERSON COMPANY) under Companies Act,2013. Also all provisions and fees are explained considering company having share capital and limited by shares.

First let us see some requirements and limitations of Private Limited company-

1. There must be at least 2 promoters.

2. There must be minimum 2 and maximum 15 directors. Provided that company can have more than 15 directors by passing a special resolution.At least 1 director should be resident of India.

3. There must be minimum 2 and maximum 200 shareholders/members.

4.  There must be some restriction by Articles of the Company on right to transfer its shares.

5. Private company can not invite the public to subscribe for any securities of the company.

6. Paid up capital must be minimum 1 lakh.

Now let us list the formalities required for formation of a new Private Limited Company-

1. NAME APPROVAL- First step is selection of name of the company and applying for the same in Form INC-1. Once approved by ROC, this name will be reserved by ROC for 60 days. Fee  is Rs.1000/- for this Form. For filing of this form applicant must have digital signatures. This Form can be signed by Manager, CEO, CFO, Company secretary or any other applicant. Chartered Accountant not mentioned here.

2. DIN OF FIRST DIRECTORS- Proposed directors of the company should take DIN as this information is required to be mentioned in Form No. INC-1 for name approval. DIN will be applied in DIR-3. For filing DIR-3, proposed director should have DSC also. Fee of this Form is Rs.500/-. For detailed procedure of DIN please go to blog "Directors and DIN Formalities".

3. CORRESPONDENCE ADDRESS- Selection of correspondence address is required and to be mentioned while filing form for incorporation ( Form INC-7).

4. DRAFTING OF MEMORANDUM AND ARTICLE- After name approval, Memorandum and Articles to be drafted. Memorandum and Article shall be signed by each subscriber to the Memorandum in presence of one witness. At least 2 persons will subscribe their name to a memorandum. These 2 persons will be deemed to be the members of the company from the date of Incorporation of the company.

5. INC-7 FOR INCORPORATION OF COMPANY- Form INC-7 need to be filed within 60 days of application in Form INC-1 for name approval. Fee is payable for stamp duty, Memorandum and Article. To view the fee applicable for INC-7, Memorandum and Article of Association of company having share capital click here. For stamp duty rate please check rates applicable for different states. Sometimes rates are also displayed on MCA website.

6. CERTIFICATE OF INCORPORATION- After scrutiny of all documents by ROC, ROC will issue Certificate of Incorporation in Form No.INC-11.

7. FILING OF FORM INC-21 (FOR DECLARATION OF RECEIPT OF VALUE OF SHARES SUBSCRIBED BY SUBSCRIBER TO MEMORANDUM)- After issue of Certificate of Incorporation  (COI) by ROC, Company shall file within 180 days of issue of COI declaration in Form INC-21 that Subscribers to memorandum have paid value of shares agreed to be taken by them. This Form will be signed by Director and will be certified by Practicing Professional. Fee applicable is as follows:

8. FILLING OF FORM INC-22 (VERIFICATION OF REGISTERED OFFICE)- Company shall file verification of registered office in Form No. INC-22 within 30 days of incorporation. This Form shall be signed by director/Manager/Company Secretary and will be certified by a practicing professional. Fee applicable is as follows:

9. PARTICULARS OF FIRST DIRECTORS IN  FORM NO. DIR-12- Particulars of each person mentioned in the articles as first director of the company and his interest in other firms or bodies corporate along with his consent to act as director of the company shall be files in Form No. DIR-12. Fee applicable is as follows:

Following documents need to be filed with Form No. INC-7-

(i) Memorandum of Association
(ii) Articles of Association
(iii) Declaration in Form No.INC-8 (declaration by professionals)
(iv) Affidavit for each of the subscriber to the memorandum in Form No.INC-9
(v) Proof of residential address
(vi) Specimen signature in Form No. INC-10 ( specimen signatures of subscriber to memorandum verified by Banker or Notary)
(vii) NOC in case there is change in the promoters (first subscribers to Memorandum of Association)
(viii) Optional attachment

Disclaimer: This article is being circulated for facilitating discussion on concern topic. Any person before making any decision or taking any action should properly consult and take expert opinion. It is just a humble attempt to clarify and circulate the views of the author.